“Idiots in Canada do not understand rights offerings,’’ said financier Robert Friedland

Financier Robert Friedland has made some highly frothy comments in connection with a Turquoise Hill Resources Ltd. (TSX: T.TRQ, Stock Forum) rights offering.

In an email to Tommy Humphries at CEO.CA, Friedland said Turquoise Hill shareholders should participate in the rights offering, which aims to raise $2.4 billion, money that will be used to repay amounts owed to the company’s majority shareholder Rio Tinto PLc (NYSE: RIO, Stock Forum).

Friedland’s spokesman in Vancouver said the financier owns 8% of Turquoise Hill, which in turn holds a 66% stake in the massive Oyu Tolgoi copper-gold-silver mine in Mongolia.

Turquoise Hill said last week the company has filed a final prospectus with securities regulators, outlining details of a rights offering.

Under the terms of the offering, each Turquoise Hill shareholder will receive one transferrable right for each common share held as of December 6, 2013.

Each right entitles the holder to purchase one common share of the company at either US$2.40 per share or US$2.53 per share, an amount that represents a discount of approximately 42% to the closing prices on the NYSE and TSX on November 25, 2013.

Turquoise Hill shares rose 3.6% to $4.27 Tuesday, leaving a market cap of $4.3 billion, based on over one billion shares outstanding. The 52-week range is $9.62 and $3.81.

Under an earlier agreement Rio Tinto is required to acquire any shares not taken up under the rights offering.

“People should buy the rights and exercise them hand over fist,’’ Friedland told CEO.CA by email on Monday evening.

He went on to say in the email that “post the rights issues, the company is in full commercial production, the company will be debt free and have receivables of $750+ millions in copper-gold inventory and sales pipeline, plus a $2 billion receivable from the Mongolian government.”

“Idiots in Canada do not understand rights offerings are not dilution..everyone participates equally…rights offerings are the fairest form of equity finance ever developed by the human mind,’’ he said.

Turquoise Hill has said over one billion shares are expected to be issued under the rights offering.

It seesm that Humphreys attended one of Friedland’s speaking engagements in London this week.

Comments

“Idiots in Canada do not understand rights offerings are not dilution..everyone participates equally…rights offerings are the fairest form of equity finance ever developed by the human mind,’’ he said.
Friedland is a desperate man and is just venting in order to create some interest to finance the company so that he can get richer.

He ignores the fact that by making the right exercise price at a large discount he is basically forcing shareholders to pony up more money. So it is really a scheme to force more investment by the current shareholders. Not a very nice thing to do to shareholders if you ask me.

This imbecile was looking for one mineral but in turn he found another by sheer luck and that made him rich so now he is mistaking luck with smarts….investors are not idiots but rather smart enough to look for value rather aiming for luck….and since most of these so called rich people have moved away from the country that gave them opportunity to become rich then they should go and try to sell the shares to their newly adopted countries' citizens. this is all my own opinion and i urge you...

Firstly... I don't like being forced to buy something, just to keep what I already have. Secondly... 'the enemy' get's to buy whatever shareholders don't, thus placing even a greater squeeze on bagholders. Surely, just like prior rights issues, one must use the opportunity to trim one's holdings and mitigate what will surely be a loss.

I agree with his comments rights offering are the fairest way for companies to raise capital.Private placments at discounts to the stock price kills existing shareholders and rewards those who have an inside line with the underwriters usually instituions and insiders

Financier Robert Friedland owes investors an Apology for the insulting remark about them being "Stupid". Investors know the difference should get more respect they deserve.
He is assuming "Canadian Investors" are stupid to know the difference between delusion of shares and "right offerings". Investors are taken so often by millions of dollars. Why would they know the difference between the two.The system enforces the rules and controls the regulators to suit the...

And because the market knows that millions of rights will be exercised at $2.53, that's where the share price will drop to within days of them becoming exercisable.
Why buy in the open market at a higher price when you can buy someone else's right to buy it at $2.53 and then exercise it.